AUDITING AND AUDITORS’ TOOLS: WHY SIMPLIFICATION MATTERS MORE
DOI:
https://doi.org/10.18623/rvd.v23.5405Keywords:
Audit Effectiveness, Information Systems, Tax Regulations, Tax, RevenueAbstract
While governments increasingly invest in digitalisation to boost tax compliance, the actual impact of these technologies on the front lines of tax auditing remains questionable. This study investigates the paradoxical relationship between information system capabilities, regulatory frameworks, and tax audit effectiveness in developing economies, focusing on Indonesia. Using survey data from 100 tax auditors using via Partial Least Squares Structural Equation Modeling (PLS-SEM), we evaluate the core drivers of audit effectiveness. Contrary to prevailing digital-first narratives, our findings reveal that current information systems in Indonesia do not significantly enhance auditors' ability to recover tax underpayments. Instead, the regulatory structure remains the dominant factor influencing audit execution. These results highlight a critical disconnect: to optimize revenue collection, policymakers must prioritise regulatory simplification to empower auditors, while undertaking strategic overhauls of IT investments to ensure digital tools generate operationally relevant, actionable outputs.
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